German sportswear giant Adidas raised its 2021 sales outlook as it expects strong demand for new products despite ongoing lockdowns in Europe, supply chain challenges and political tensions.
Adidas now expects sales to grow at a high-teens percentage rate in 2021, compared to the forecast it gave in March for growth of a mid to high teens rate, with a jump of around 50 per cent expected in the second quarter.
It said the acceleration would be driven by new products as well as big sports events like the European soccer championship and the Copa America.
Brands including Adidas and rivals Nike and Puma faced online attacks in China in March over statements about their sourcing of cotton from Xinjiang after reports of human rights abuses against Uyghur Muslims.
Adidas’s new outlook takes into account the geo-political situation as well as the impact of prolonged lockdowns in Europe and industry-wide supply chain challenges.
However, it saw sales jump 156 per cent in greater China in the first quarter, a year after the coronavirus pandemic hit there. At the end of the first quarter, 89 per cent of the company's stores had reopened.
Adidas’ first-quarter sales rose 20 per cent to €.268 billion ($6.35 billion), ahead of average analyst consensus for 5 billion, while net income from continuing operations jumped to €502 million.
The company stuck to its forecast for 2021 net income from continuing operations to rise to between 1.25 billion and 1.45 billion euros.